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Schools Finance Handbook
Section
Introduction
1. Governance…………………………………………………………………....5
1.1 Framework of Responsibility
1.2 LBE as Local Authority
1.3 The School
1.4 Committees
1.5 Structure of Delegation
1.6 Business/Pecuniary interest
2. Financial Planning …………………………………………………….…….12
2.1. School Improvement Plan
2.2. Budgeting, Surplus’ & Deficits
2.3. Capital Expenditure
3. Budget Monitoring………………………………………………………..….16
4. Purchasing…………………………………………………………………….18
4.1. Additional Resources for Procurement guidance
5. Financial Controls……………………………………………………………20
5.1. Recording systems and procedures
5.2. Cheque Signatory Limits
5.3. Staff Absence and Shared Responsibilities
6. Income………………………………………………………………………….25
6.1. Charging & collection policies
6.2. Receiving income
6.3. Reconciliations and writing off debt
7. Banking…………………………………………………………………………30
7.1. Bank Statements & reconciliation
7.2. Finance Returns
7.3. Staff Responsibility
7.4. Dealing with bank surpluses/deficits
8. Payroll/Personnel……………………………………………………………..34
8.1. Payroll
8.2. Whole School pay policy
9. Petty Cash……………………………………………………………………...37
9.1. Handling of and payments with petty cash
9.2. Petty Cash controls
10. Tax……………………………………………………………………………….40
10.1. Rules & regulations
10.2. Payment of VAT invoices
10.3. Accountability of VAT
Appendix 3
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11. Voluntary Funds…………………………………………………………………43
11.1. Separate accountability
11.2. Legal position
11.3. Implications of charity status
11.4. Roles of charitable trust
12. Insurance/Safety school outings……………………………………………..49
12.1. General Information
13. Fraud & whistleblowing policy………………………………………………..51
14. Assets……………………………………………………………………………..52
14.1. Stock/Inventory
14.2. Disposals and write offs
14.3. Asset management plan
Glossary of terms
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. Introduction
How the guide was put togeth.er
This Finance Handbook has been put together in the form of a
commentary on previous guidance published jointly by OFSTED and
the Audit Commission.
We have extended the relevant material from that document in our
commentary so that it relates to local procedures and practices in the
London Borough of Ealing. We have consulted various interested
groups and individuals such as governors' groups, Head teachers, and
other school staff arid relevant individuals within the LA.
The commentary draws upon a number of other sources:
i. The London Borough of Ealing's (LBE) Financial Regulations
ii. The Fair Funding Scheme
iii. DfE Financial guidance.
The handbook sets out the principal elements of a sound approach to
the administration and control of School finances. Many of the
standards are based on legislation; others are based on accepted
audit practice. The main purpose of the standards is to set out a
framework of good practice to help schools establish and maintain
robust financial systems.
How to use this guide
It is intended that Going forward it is likely that audits will become
thematic, with specific areas (i.e. Procurement, Payroll etc.) examined in
greater detail across a number of schools. Schools should refer to the
2015/16 annual audit report for key audit recommendations.
It is therefore important that your governing body and school consider
undertaking a review of the arrangements for financial management
within their own schools in the light of this handbook.
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The extent to which schools wish to delegate this work either to a
committee or directly to the Head teacher will, vary. However, we strongly
recommend that the full governing body receive an account of the
findings, approve the action list and review its completion.
In each Standard we have named the Section within the LA that deals
with this particular item, together with the appropriate contact and
telephone'
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Section 1: Governance
Governing bodies (GB) are the strategic leaders of our schools and have a vital
role to play in overseeing the financial performance of the school and making
sure its money is well spent.
This function is reflected in regulations and in the criteria Ofsted inspectors use
to judge the effectiveness of governance. Governing bodies are responsible for
making sure their school’s money is well spent. They should do this by making
sure they have at least one governor with specific skills and experience of
financial matters, for more information please refer to the constitution of
governing bodies of maintained schools.
General Contacts
Therese McNulty: School Workforce and Governance Development [email protected] Julie Lewis: Assistant director, School Effectiveness [email protected] Gary Redhead: Assistant Director-Schools Planning & Resources [email protected]
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Roles and responsibilities
The roles and responsibilities of the GB, its committees, the head teacher and other staff in relation to financial decision-making and administration should be clear and preferably set out in writing in the form of a scheme of delegation.
1.1. Framework of Responsibility
The governing body’s responsibility lies within a framework which
delegates responsibility from the local authority (LA) to GB’s and to the
head teachers. GB’s can also delegate responsibilities to their
committees, individual governors and the head teacher. This section
defines that framework and shows the roles and responsibilities of the
various parts of the framework.
1.2. London Borough of Ealing as Local Authority
For guidance on the role that LBE play as the LA please refer to the DfE
Governers’ Handbook.
Assistant Directors, School Effectiveness/School Planning & Resources
Management of the scheme of delegation, including recommendations to
the LA for the withdrawal of delegation.
Monitoring the effectiveness of the scheme for the Local Management of
Schools.
Provision of financial advice and support to ensure that schools are
sufficiently prepared to be able to achieve appropriately high standards
and levels of performance.
Under the terms of the Local Government Act 1972 and subsequent
legislation is the “responsible officer” for the probity and regularity of the
Authority’s financial activities.
Establishment and monitoring schools’ financial performance including
value for money and audit of schools’ systems of internal financial control.
Where appropriate to fulfil the above responsibilities, provision of financial
advice and attendance at meetings of school governors.
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1.3. The School
The School Governing Body (GB)
Governors should follow the guidance set out
For a summary of key governing body roles and responsibilities please
refer to the support notes of the Schools Financial Value standards
(SFVS) and the DfE Governors’ Handbook.
Governing bodies must return a signed version of the Schools Financial
Value standards assessment form to schools accountancy services 2
weeks prior to deadline of 31 May 2016.
For examples of Terms of Reference visit the DFE website via:
https://www.gov.uk/government/publications/school-governance-
regulations-2013
and:
https://www.egfl.org.uk/school-effectiveness/school-governance
Head teacher
Advising the GB on the establishment of its policies, and on all budgetary
aspects. Please note the GB is required to hold a number of statutory
policies and guidance documents. However, the drafting of them should
be delegated to members of the senior leadership team for the full GB or
appropriate committee (if delegated rights to) approves.
Day to day operation of the budget and financial responsibilities
delegated to him/her by the GB.
For more information please refer to the additional resources of the
Schools Financial Value standards
School Business Manager (SBM)/Bursar/Finance Officer
Day to day administration and management of the budget as delegated
by the head teacher/governors.
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Providing the head teacher, governors, budget holders and the LA with
regular customised reports
1.4. Committees
It is essential that schools have a finance committee to which they
delegate financial review and oversight on matters which it is not practical
for the strategically focused board to review at a detailed level. It’s
membership and remit should be reviewed annually. Such delegation of
responsibilities should be done within the framework set out in the
additional resources of the Schools Financial Value standards.
A sample of terms of reference can be found at: www.egfl.org.uk/governance
1.5. Structure of Delegation
Decisions made by committees, including the finance committee, must be
reported to the GB. The terms of reference of non-finance committees
must make clear the extent of their freedom to make financial decisions
without consulting the finance committee.
Authorisation limits for financial matters must be established by the GB.
Examples for average sized primary, special and secondary schools are
given below. It is stressed these are only examples and each school
will need to decide what is appropriate for its own circumstances. A
clear segregation of duties should therefore be applied suitably.
Illustration of Authority
(a) Average sized primary, special schools (429 pupils*)
Commitment to
Purchase
Certification
of invoices
Approval
of
viremen
t Governing body or
Finance Committee #
£25,000+ No authority £25,000+
Finance Committee Up to £25,000 per item
No authority Up to £25,000
**Head
teacher/
Deputy
Up to £10,000 per item
No limits ** Up to £10,000
Head of Year/budget holder
Up to £500 per item No authority No authority
SBM/Bursar/ **
Finance Officer
No authority ** Signed and dated for verification
No authority
(b) Average sized secondary school (991 Pupils*)
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Commitment to
Purchase
Certification
of invoices
Approval
of
viremen
t Governing body or Finance Committee
£50,000+ No authority £50,000+
Finance committee Up to £50,000 per item
No authority Up to £50,000
*Head teacher/Deputy Up to £30,000 per item
No limits ** Up to £30,000
SBM/Bursar** No authority ** Signed and dated for verification
No authority
Budget Holder Up to £500 per item No authority No authority
Footnotes #Where full financial responsibilities delegated * Based on 2015/16 total number of funded pupils, inclusive of reception uplift and exclusive of high needs places ** No limits on business rates or utility invoices **Should refer expenditure above a specific amount e.g. £10,000 to Finance Committee unless authorised by G.B.
The above is only a guideline, and each school will need to look at it’s own individual circumstances and set limits accordingly. The basis of the change needs to be documented, the change ratified by the GB/Finance Committee and the LA informed.
The scheme of delegation to staff is the responsibility of the head teacher
and should specify not only the functions of individual staff but also the
limits of their authority. It should be consistent with the principles of
internal financial control regarding separation of duties. Clear definitions
of the duties and responsibilities of staff should be produced in writing
and be consistent with the framework of delegation established by the
governing body. ( See Appendix 2 ).
In terms of financial reporting, the GB must receive sufficient information
to be satisfied that proper processes have been undergone by any
committee exercising delegated powers and be able to ask questions
about the most significant decisions made. Such delegated powers
should be subject to a threshold set by Schools through the scheme of
delegation.
Financial Information
The GB should agree with the head teacher the minimum frequency, level of detail and general format of the financial information to be provided to it, especially in relation to budget monitoring reports.
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1.6. Business/Pecuniary interest
Below is a summary of key points relating to business/pecuniary interest, schools must adhere to national guidance on this matter, please refer to section 25 of the constitution of governing bodies of maintained schools for statutory guidance.
A business/pecuniary interest is where a governor or member of staff (or
close relatives of either) receives “remuneration” from a “firm”.
“Remuneration” includes not only salary, wages, fees, but also other
payments such as commission, honoraria, dividends, agency fees and
interest. The expression “firm” includes not only companies and
businesses but all organisations and even individuals.
A register of business/pecuniary interests must be established by every
GB and updated annually or more frequently for individuals where this is
appropriate. The register must include not only governors and staff but
also the pecuniary interest of spouses or close family where this is
appropriate, e.g. the child of the chair of governors might own a local
building firm. An example of a register is (See Appendix 3).
Staff and governors should also additionally declare an interest not just
pecuniary but also where a conflict of interest may arise if and when,
matters are about to be discussed or decided, and withdraw or take no
part in the discussion where this is considered appropriate by the
individual concerned or by other governors.
Any governor who has a direct or indirect financial interest in a contract
and is present at a governors’ meeting when the issue is considered,
must disclose their interest as soon as possible after the start of the
meeting and must not take part in any associated discussions or vote.
The only exception to the requirement to disclose a pecuniary interest is
that if the interest is so distant or small that no ordinary right-thinking
person would expect it to influence someone who might have dealings
with the firm concerned. In such cases, it need not be disclosed. The
Business/Pecuniary interest
The GB should establish a register of business interests of governors, the head teacher and any other staff who influence financial decisions. This should be open to examination by governors, staff, parents and the LA.
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most common example is a modest shareholding in a large public
company even if the school has or may have dealings with the company.
Non pecuniary Interest: It is good practice to declare links to
organisations which have dealings with the school and which may give
rise to a conflict of interest even where no pecuniary interest or
advantages exist or accrues. This covers areas where relationships might
be seen to influence judgements and convey the impression of personal
motive.
It is only a requirement upon those staff who influence financial decisions, principally the Head teacher, Deputy, SBM/Bursar/Finance Officer.
If there is no material change during the year then it is not necessary for
an entirely new form to be completed. Simply arrange for the original form to be re-signed and dated.
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Section 2: Financial planning
2. Why is this area important?
Financial planning is an essential part of good financial management. It provides a school with a clear view of how it intends to use its resources. It has two interrelated elements: the School Improvement Plan and the school’s budget. Good budgeting means not running into deficit, but equally not carrying large balances of unspent money from year to year without good reason. This means considering how the budget for a particular area of spending will balance out over a longer period than the next financial year. General contacts Gary Redhead: Assistant Director – Schools Planning & Resources [email protected] Adam Whalley: Programme & Commercial Manager [email protected]
Schools Accountancy Services: [email protected]
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2.1. School Improvement Plan
There must be a clear link between the budget and the improvement plan.
Within the support notes of the SFVS there is guidance on a process for linking
the SIP to the budget. Such SIP’s should feed into medium term educational
and budget plans.
In creating a SIP schools are expected to consider the management of
resources through the consideration of the DfE’s 10 planning checks.
2.2. Budgeting, Surplus’ & Deficits
Budget setting process
To ensure that Schools stay within budget from 2016/17 onwards it is
recommended that schools complete 3 year forecasts of spend and budgets so
that early action can be taken by schools in response to possible pressures.
This is mandatory for Ealing maintained schools as of April 2017.
For more information on the setting of realistic estimates for the elements
listed above please refer to the estimate guidance notes.
Development and budget planning
The school should have a School Improvement Plan (SIP), which includes a statement of its educational goals to guide the planning process.
Medium term educational and budget plan
The SIP should cover in outline the school’s educational priorities and budget plans for the next three years, showing how the use of resources is linked to the achievement of the school’s goals.
Planning for solvency
The school’s budget should be based on realistic estimates of all expected expenditure and income, including grant income, so that planned expenditure does not exceed the available budget.
Periodic review of budget
The governing body should ensure that the main elements of the school’s budget are periodically reviewed to ensure that historic spending patterns are not unhelpfully perpetuated.
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The LA has a set budget planning timetable for issuing budget figures to
allow schools to prepare estimates of expenditure and income sufficiently
in advance of each financial year to allow for consideration and approval
by the governing body. Even if details of the school’s funding have not
been finalised it is important that the governing body considers spending
priorities in the light of the estimated or indicative budget.
January/February May
Indicative LA production of school budget allocations for the next financial year, reflecting October school pupil census numbers. Indicative in January with final figures in February
School submission of
balanced budget by the 1st
Friday in May.
For a timetable for budget approval and various publication please refer
to the draft annual timetable in the guidance on budget process 2016-17
document.
(See Appendix 4&5 for suggested Timetable for Heads / Finance staff)
School Deficits
Governing bodies are not allowed to plan for a deficit budget unless they have prior approval from the LA for a licensed deficit budget. For approval to be given, schools need to provide an explanation for incurring a deficit and produce a financial plan stating in detail how the deficit will be paid back within a maximum period of three years.
Emphasis of early action and indication to LA – these both involve LA intervention
For additional information on school licensed deficits please refer to section 4.9 of Ealing’s scheme for financing maintained schools.
Surpluses
Local Management of Schools’ Budgets provides the opportunity to accumulate funds for specific projects. However, funds put aside from a
Budget profiling
The governing body should ensure that the main elements of the school’s budget are periodically reviewed to ensure that historic spending patterns are not unhelpfully perpetuated.
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given year’s budget for no particular purpose will be at the expense of the resources available for the education of the current cohort of pupils.
For information on the budget control mechanism please refer to the section 4.2 of Ealing’s scheme for financing maintained schools.
The planned level of balances should be the product of a conscious decision formally approved by the governors and linked to the School Improvement Plan. Governing bodies and parents should be fully aware of the actual and budgeted levels of carry-forward at their schools. Governors should be given the information to make considered judgements taking account of all the circumstances about the level of carry-forward for which they are budgeting.
The practice of holding balances as ‘reserves’, which are not included as part of the annual budget setting exercise, is not considered appropriate. By including balances in the annual budget, schools will ensure that balances are properly linked into the School Improvement Plan and are not simply held as unspecified contingency funds.
Inevitably during the year actual levels of balances will tend to deviate from the plan because of unforeseen factors. The level of balances should therefore be reviewed when:
i. considering the prospects for the medium term budget. ii. in determining the annual budget. iii. at the start of the spring term (when schools have a good idea of
any expected surplus in the current financial year).
It is important that balances built up through cautious budgeting should be considered as part of medium term budgeting to determine realistic balances that need to be held by the school, for example to offset specific reductions in financing anticipated in the future.
2.3. Capital Expenditure
Capital expenditure is expenditure on items costing more than £10,000
that will provide benefit to the school for more than one year. Such items
include expenditure on land, construction work, high value equipment,
and vehicles.
For additional information on capital expenditure from budget shares, please
refer to section 2.14 of Ealing’s Scheme for Financing Maintained Schools.
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Section 3: Budget monitoring
3. Why is this area important?
Regular monitoring of income and expenditure against the agreed budget is central to effective financial management. It allows governors, the head teacher and staff to maintain financial control by reviewing the current position and taking any remedial action necessary. However budgets are not set in stone. The original budget may need regular updating, following consultation with governors, to take account of in-year developments. If this is done it is important to retain a copy of the original budget to support future budget construction.
Careful monitoring of the budget also provides a mechanism to hold budget holders to account. This applies both to the use of devolved budgets within the school and to the way the school’s resources are being used more broadly.
In practical terms, budget monitoring involves examining monthly monitoring reports and taking action to tackle any significant variances. This process should be carried out at all levels and include any devolved budget elements. Expenditure on individual initiatives should be tracked to enable the school to assess their costs and effectiveness against the criteria set out in the School Improvement Plan. By receiving regular reports, the governing body can feel secure about the way its decisions are being implemented and take action where it is needed to bring about changes. In this way, budget monitoring provides a useful starting point when setting the budget for the following year.
Guidance on schools’ budget management – assistance in financial planning, including benchmarking using your school’s CFR (Consistent Financial Reporting) information – can be found at: www.education.gov.uk/sfb/login + school username and password
Online support for schools is also available from https://www.gov.uk/search?q=schools+cfr
General contacts
Gary Redhead: Assistant Director-Schools Planning & Resources [email protected] Tamara Quinn: Children’s and families senior management team [email protected]
Adam Whalley: Programme & Commercial Manager [email protected]
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3.1. Monitoring procedures
Schools can run reports from their local accounting systems (the majority
of schools in Ealing use the SIMS FMS accounting package) which can
provide them with the necessary information to produce an income and
expenditure report.
The governing body should receive clear and concise synopsis of the
budget monitoring report at least three times a year. It is advised that the
finance committee review the budget monitoring reports on a half termly
basis.
Schools should monitor income and expenditure not only against budget
but also against the schools improvement plan.
Schools can find additional guidance on best practise budget monitoring
techniques and procedures in the support notes of the Schools Financial
Value standards (SFVS).
3.2. Cash flow forecasting
To avoid liquidity issues head teachers should produce monthly cash
flow forecasts to ensure that the school’s bank account does not go overdrawn.
For information on cash advances from LBE please refer to the budget payments and cash flow spread sheet.
3.3. Consistent financial reporting
Consistent Financial Reporting (CFR) standardises, simplifies and
streamlines the reporting of school finances in all local authority (LA)
maintained schools in England.
For information of the CFR process please refer to the DfE’s consistent
financial reporting guidance page.
Monthly monitoring
The head teacher should produce monthly budget monitoring reports for income and expenditure, including sums committed but not yet paid and out-turn forecasts, against the approved budget.
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Section 4: Purchasing 4. Why is this an important area?
Value for money Schools will want to achieve value for money (VfM) from all of their purchases.
This means getting what is needed in the correct quality, quantity and time at
the best price possible. Although price is not always the overriding factor in
deciding which supplier to use, it is an important one. Obtaining value for
money means comparing “like for like” for the complete package with all the
associated costs and benefits from acquisition to disposal. There are various
ways of establishing whether the prices being obtained are competitive.
Consulting the Strategic Procurement Unit, checking trade journals and
catalogues and seeking quotations or formal tenders are all examples of good
practice.
The application of VfM techniques in the procurement process in Schools was
cited as a concern in the 2014/15 internal audit activity summary.
Compliance Public procurement is governed by both domestic and European legislation, the requirements of which are incorporated in the Council’s constitution (The Contract Procedure Rules and The Financial Procedure Rules). Both Internal and External audit carry out random and planned inspections and non-compliance may lead to disciplinary action. European Legislation The EC Procurement regulations apply to all public authorities, including government departments, local authorities, NHS Authorities and Trusts and Schools. The rules set out detailed procedures for the award of contracts whose value equals or exceeds specific thresholds. Details of the thresholds that apply are found here
General contacts Kate Graefe: Procurement Manager Strategic Procurement Unit [email protected]
Adam Whalley: Programme & Commercial Manager [email protected]
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4.1. Additional Resources for Procurement guidance
For more guidance on public sector procurement requirements please
use the following links:
EGfL Procurement advice
DfE’s Buying for schools
HM Treasury’s Managing public money
Procurement policy should be linked into a school’s scheme of delegation
and their individual authorisation policy.
For schools using financial and operating leases arrangements please
refer to IAS 16 leases link in the IFRS’ unaccompanied standards, in
order to access this document on leases you will need to register for a
free account with the IFRS.
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Section 5: Financial controls
5. Why is this area important?
Schools have many systems for processing and recording transactions. Examples may include purchasing, payroll and income collection systems. These systems are important for two reasons. Firstly, they serve to protect school resources from loss or fraud. Secondly, they provide information to staff and governors about how the budget is being spent. Governors are then able to make use of this information to guide their decision-making.
By building internal controls into systems, governors and staff should be confident that transactions will be properly processed and that any errors or fraud will be detected quickly. Examples of such controls are:
Internal check – the checking of one person’s work by another; Separation of duties – distributing duties to ensure that key tasks are
assigned to separate members of staff;
Systems manuals – descriptions of how systems should operate Authorisation - the certification that a transaction or event is acceptable for
further processing e.g. authorising an invoice for payment; and A clear audit trail covering all stages of a transaction, e.g. from copy
order to invoice, to accounts, to cheque, and in reverse. The concept of internal financial control applies to small and large schools. There is a particular issue for small primary schools in the separation of duties. The small number of teaching and administrative staff means that it is not always possible to achieve the situation described by the standards. In such cases it is always helpful if the school’s approach to the standard is documented. In schools with only one administrative officer, the head teacher or the deputy will need to exercise some internal checks and authorise transactions to ensure separation of duties. Many schools have involved governors, so that they are within the spirit of a standard, if not its complete implementation.
General contact
Steven Tinkler: Head of Audit & Investigation [email protected]
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5.1. Recording systems and procedures
All schools must have written description of financial systems indicating
procedures and responsibilities of staff, i.e. how, when and by whom
procedures are to be carried out. As schools vary in their structure and
organisation it is not possible to prepare a model, which would be suitable
for all schools. However, an example for ordering goods and services
would be:
i. The schools official orders must be used for ordering all work, goods
and services. The SIMS FMS system produces the orders in the
system.
ii. The budget holder should complete the order, which records, in full,
details of the goods and services required, their estimated cost, the
ordering department and relevant account code. The order is then
entered on the computer system which places a commitment against
the budget, avoiding any overspends etc.
iii. In cases of extreme urgency telephone orders may be given but
these must be confirmed with a written order, clearly marked “in
confirmation”, as soon as possible.
iv. It is appropriate for the head teacher/deputy head or senior officer to
authorise all orders.
v. Before an order is authorised the budget holder must be satisfied that
there is adequate budget available.
vi. The School Business Manager/Bursar/Finance Officer will:
a. Send the top copy of the order to the supplier without delay.
b. A commitment will automatically be made if the school operates a
local computer accounting system (FMS); and
c. File a second copy of the order in the “outstanding order” file.
vii. When the goods are delivered they must be received and checked,
preferably by a responsible person, who cannot be the person who
placed the order or administered it. That person should initial and
date the Goods Received Note as evidence of their check.
viii. The delivery note must be passed to the School Business Manager/Bursar/Finance Officer without delay, who should then check the details against the copy order.
Recording systems and procedures
The GB must ensure that there are written descriptions of financial systems and procedures which are kept up to date. All appropriate staff should be trained in their use.
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ix. The School Business Manager/Bursar/Finance Officer will:
a. Attach the delivery note to the copy order in the “outstanding order” file.
b. Check the invoice details and arithmetic by reference to the copy order and the delivery note and record the payment details.
c. Remove the copy order from the “outstanding order” file, attach the invoice onto the copy order and transfer the copy order to the “completed order” file.
d. Print out a cheque from the accounting system and issue a cheque for payment (if manual cheques used).
e. Pass the cheque with the supporting paperwork (i.e. order, delivery notes and invoices) to the authorised signatories for signature. If the head teacher has authorised the order, there must be a second signatory on the cheque. If the goods were originally ordered by the head teacher or deputy head, the order should be authorised by the other, ditto the invoice.
5.2. Cheque Signatory Limits
The LA requires that the signatories should be the head teacher/deputy head/or other senior members of staff BUT not the person who is responsible for operating the account and preparing the cheques. A second signatory will be required for cheques over £500. Governors cannot be signatories on school accounts as they are not employed by the LA but they may wish to be aware of all cheques above say £5,000.
BACS Procedures
Refer to Appendix 9
5.3. Staff Absence and Shared Responsibilities
A detailed description of financial systems on financial procedures and
systems helps training of new staff and defining roles and responsibilities
when key staff are absent.
In all schools at least two people must be involved in passing a payment
or recording and banking income. Typically one person would sign for
Financial control during absences
The head teacher should ensure that financial control is maintained in the absence of key personnel through staff training or by arranging job shadowing.
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goods received and another certify the invoice or one person would
receive and record income, the other doing the banking. The head
teacher or another member of the SMT or a governor must check bank
and cash reconciliations and other finance information on a regular basis
and must sign and date it as evidence of these checks. This is a vital
check on potential fraud.
5.4. Document Guidance
The Record Management Society of Great Britain have issued retention
guidelines for schools. Web address:
http://www.irms.org.uk/resources/information-guides/199-rm-toolkit-for-school
It is the responsibility of the governing body to determine a document
retention policy and develop procedures that would satisfy these needs.
Shared responsibilities
The head teacher should ensure that duties related to financial administration are distributed so that at least two people are involved. The work of one should act as a check on the work of the other, and all checks should be fully documented where possible due to size of school.
Retention of documents
The school should maintain proper accounting records and retain all documents relating to financial transactions for at least the period recommended by the LA/HMRC or Record Management Society.
Trace from document to accounts
All financial transactions should be traceable from the original documentation to the accounting records and vice versa. For example, it should be possible to trace a cheque to the expenditure in the accounts, to the invoice and to the copy order. Equally, it should be possible to perform the same exercise in reverse.
Alteration of documents
Any alterations to original documents such as cheques, invoices and orders should be clearly made in ink or other permanent form, and initialised.
Access to accounting records
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This also applies to computer records. Authorised staff should have a
password, which is not disclosed to anyone, and is changed regularly, at
least termly, as a minimum.
5.5. Data protection
Schools should ensure that they are compliant with the Data Protection Act
1998. A summary of key implications of this act are found on gov.uk under the
Data protection page.
All accounting records should be securely retained when not in use and only authorised staff should be permitted access.
Earmarked expenditure to be accounted for separately
The head teacher should ensure that all expenditure from sources of earmarked funding is used for its intended purpose.
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Section 6: Income
6. Why is this area important?
Cash is a valuable asset and is therefore vulnerable to fraud. It is vital that
appropriate controls are in place to ensure its security. It is also important that the
school keeps within the insurance and LA limits on holding cash on school
premises.
Income can come from various sources, including grant funding, parental
contributions and lettings and via online payment systems such as
“Parentpay/Tucasi”. The governing body should establish a charging policy and
review it every year. The head teacher is responsible to the governing body for
accounting for all income due and cash collected, and maintaining accurate records
for this.
This section covers general income controls. These include establishing procedures
that ensure that income is banked regularly and that the amount banked is
reconciled with the amount recorded in the accounting records. Frequent and
regular checking against bank records is important to ensure that all income is
secure.
For a list of income sources that are paid to schools through LBE (Early years
funding, PPG, Sixth Form Grant etc.) along with models for forecasting these
sources of income please refer to the estimate guidance notes.
General contacts Schools Accountancy Services: [email protected]
Steven Tinkler: Head of Audit & Investigation [email protected]
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6.1. Charging & collection policies
The level of charges to be levied for each activity where the school generates income should be reviewed and approved annually by the governing body. The LA does not operate mandatory charging policies for these as it has delegated this responsibility to schools. (See Appendix 8 )
If as a result of a letting, costs are incurred by the LBE on repairs, or the replacement of buildings, grounds or equipment, the LA reserves the right to charge the cost to the school’s delegated budget.
For VAT implication of income generation please see section 10.
Records should be kept showing how much is owed and who it is owed from.
Wherever possible payment should be obtained in advance and
especially for lettings.
All cheques which represent official income must be payable to the
name of the school.
Schools may wish to develop their own local invoicing system
including systems such as “Parentpay/Tucasi”. If they adopt this method:
i. They should design pro-forma invoices, which should contain at least the school’s name and address. SIMS FMS has an Accounts Receivable section, which includes the generation and processing of invoices, including VAT details.
ii. The school will need to establish a system of debt collection itself. This should include raising reminder invoices and letters
Charging policy
The governing body should establish a charging policy for the supply of goods or services. This policy should be reviewed annually by the full governing body.
Collection and banking duties
The responsibility for identifying sums due to the school should be separate from the responsibility for collecting and banking such sums.
Prompt issuing of invoices
Where invoices are required, they should be issued within 30 days.
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requesting payment from any bad debtors. A procedure for writing off debts should be agreed by the governing body.
iii. SIMS FMS has a debtors system, which will automatically raise invoices and maintain a debtor’s ledger. Schools with this system may wish to make use of it.
The correct accounting analysis, including the separate analysis of VAT, should be made on the appropriate part of the income account form. Income should not be coded to expenditure codes but to an income code.
6.2. Receiving income
The collection of all income must be immediately acknowledged by
the issue of an official pre-numbered receipt or by entry in a register or
other record. The correct accounting analysis should be
made.
Wherever possible, pre-numbered receipts must be given to any
person paying or donating money to the school.
The SIMS FMS system produces receipts, which are pre-numbered. It
is therefore acceptable for schools to use the automatically
produced receipts from SIMS FMS.
Access to the safe and locked drawers is strictly controlled. Consideration must be given to ensuring that insurance cover is sufficient in respect of the amount of cash and cheques held in the school. The police should be notified of any theft along with the Insurance Section and Audit.
Use of receipts
The school should issue official, pre-numbered, receipts or maintain other formal documentation for all income collected.
Security of cash and cheques
Cash and cheques should be locked away to safeguard against loss or theft.
Prompt payment into banks
Collections should be paid into the appropriate bank account promptly and in full. Bank paying-in slips must show clearly the split between cash and cheques and list each cheque individually.
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All income received by the school must be paid into the school
bank account without delay and at least weekly. No deduction may be
made from the sum received. Officers paying money into the bank
account must record the full particulars of each receipt, including the
amount, a full description of the income, and the reference on the
paying-in slip or counterfoil.
Goods or materials sold for cash, or paid for by cheque, cannot
be released until the school has received the cash or the cheque cleared
in the school bank. Cheques offered with a valid guarantee card may be
treated as cash, subject to the condition under which the card has been
issued.
Staff carrying cash on their own should restrict the amount to £200.
When carrying cash in excess of £200 the member of staff should be
accompanied, and the maximum amount to be carried for 2 people is
£2,000. If this is not practical, the member of staff should carry a
mobile phone and the amount carried should not exceed £1,000.
6.3. Reconciliations and writing off debt
As a minimum a monthly reconciliation must be performed of the amounts
of income recorded as banked in the school’s local records. Please
refer to banking for more information.
The governing body must establish which named members of the school staff are authorised to cancel, replace and write-off a debtor’s account.
The governing body may write off debts up to the value of say £6,000. It can delegate the writing off of smaller debts e.g. under £500 to the head teacher. Any debts above £500 have to be approved by the governing body.
Reconciliation of banking
The head teacher should reconcile monthly the sums collected with the sums deposited at the bank.
Debts write-off
The school should have procedures for chasing any invoices, which have not been paid within 30 days. Debts should be written off only in accordance with LA regulations and schools should keep a record of all sums written off.
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Debts should only be written off if there is little or no prospect of recovering the money or if the cost of recovery is likely to be greater than the amount recovered. Full details of written off amounts should be kept and the records reviewed regularly to identify whether any have now become recoverable.
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Section 7: Banking
7. Why is this area important?
The proper administration of bank accounts is a fundamental financial control. In particular, regular and prompt bank reconciliations are essential. They prove that balances are correct and provide assurance that the underlying accounts have been properly compiled and are accurate. Auditors give particular attention to the frequency of bank reconciliation and view failure to keep them up to date as an indication of potential error or fraud and as a breakdown in the system of internal control.
General contacts
Schools Accountancy Services: [email protected]
Steve Tinkler : Head of Audit & Investigation [email protected]
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7.1. Bank Statements & reconciliation
It is recommended that primary schools obtain a statement fortnightly and
secondary schools weekly. The statements should be reconciled as soon
as they are received. They should be checked by the head teacher, and
signed and dated as evidence of this check. It is a mandatory
requirement of the LA that head teacher should carry out an independent
check of the reconciliation.
Periodic reviews of unpaid cheques should be made to establish reasons
why suppliers have not cashed the cheques. Cheques unpaid for longer
than six months should be stopped with the bank and cancelled and
reversed on the system.
7.2. Finance Returns
Schools are required to submit a Finance Return to the LA at the end of each term. Schools can submit them half termly/monthly in agreement with Children’s Finance. This return is a local bank account analysis, which breaks down the expenditure and income transactions that have gone through the school bank account and provides a summary of the cash flow position of the school. The LA also requires back-up documents to be submitted with the return. These are:
i. Bank history for the period of the return ii. VAT Long Summary Report (summary details of income/expenditure
by ledger code) iii. List of unreconciled payments and income outstanding for the period iv. Copy of the (recent) bank statement(s) used to balance the return v. Copy of the petty cash transaction list showing closing balance vi. VAT submittal report vii. Debtor / Creditor / Payroll Control Reports (if applicable) viii. Excel upload journal for Agresso ix. Journal Definition reports for salaries if applicable i.e. external payroll
These reports can be extracted from the SIMS FMS systems. For those using other accounting packages, it should be possible to extract this information.
The return must be balanced before it can be submitted and the information input into the LA general ledger system. This prompts a
Bank statements to be signed and countersigned
The person performing the reconciliation should sign all bank reconciliations. They should also be reviewed and countersigned by someone who understands the reconciliation process.
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VAT reimbursement due to the school and the next term’s budget advance.
There are crucial control mechanisms in the operation of bank accounts. The following are the key elements:
i. Reconciliations must be undertaken regularly, at least monthly. Schools are recommended to undertake reconciliations more frequently than monthly for their own benefit, in order to avoid difficulties in balancing the account and to permit discrepancies to be identified, investigated and resolved as soon as possible.
ii. Any discrepancies should be properly investigated, and not merely carried forward to the next reconciliation.
iii. Whoever carries out the reconciliation should date and sign it to certify that it is correct.
iv. The reconciliation should be checked by a second person who is familiar with the way in which bank accounts are reconciled, and who should date and sign the reconciliation as evidence that they have checked it. The finance return requires the head teacher to certify that it is correct and implies that they have verified the bank balances, and therefore the head teacher should also verify the bank reconciliation.
7.3. Staff Responsibility
In order to preserve separation of duties, wherever possible the person
undertaking the bank reconciliation should not be in a position to process
invoices for payment, nor receive or process income.
7.4. Dealing with bank surpluses/deficits
Investments of surplus funds
Investment of surplus funds should be placed in Banks listed of LBE’s
approved list, contact Schools Accountancy Services for this list.
Overdraft Facilities and Borrowing
Staff Responsibility
Staff responsible for undertaking bank reconciliations should not be responsible for the processing of receipts or payments.
Investment of funds
All funds surplus to immediate requirements should be invested to optimal effect in accordance with the LA’s investment policy.
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The school should not enter into any loan agreements (including
overdrafts), other than with the LA, without the prior a pproval of the
Secretary of State for Education. For additional guidance please refer to
section 3.6 on Ealing’s scheme for financing maintained schools.
Schools may have debit cards/credit cards. Credits cards are permissible
provided the balance is settled on a monthly basis. Direct debits and
standing orders are permissible. There is a scheme in place for schools to
use Government Procurement Cards. Refer to Appendix 7. Currently
there is a pilot scheme with a number of schools using government
approved RBS purchase cards. It is intended that this scheme will be
extended to more schools once the outcomes of pilot have been
assessed.
If schools use a trade card e.g. for the caretaker to purchase DIY materials, then there should be a letter of authority setting out the limits that can be committed on behalf the school.
For additional guidance on borrowing in schools please refer
An exception to this is for the purchase of minor items of resources e.g. items under £75, where a member of the school’s staff may pay for items in the first instance, obtain a receipt and then be reimbursed from the school’s petty cash.
Private bank accounts
Individuals should not use their private bank accounts for any payment or receipt related to the school’s budget.
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Section H: Payroll/personnel
8. Why is this area important?
In most schools the largest item of expenditure is the cost of staff, although a few schools administer their own payroll. In Ealing the LA provides this function for the vast majority of schools. Most foundation schools and academies have their own payroll providers. However this does not relieve the governing body and the head teacher of the responsibility for ensuring that payroll and personnel controls are in place. Schools need to be aware of a number of areas where H M Revenue and
Customs regulations may affect or determine the way payments are made. For example, there are strict rules about payments to individuals who claim to be self-employed. Schools should seek advice from the LA in such cases.
General contacts
Jane Lynham: Payroll & Pensions Manager
[email protected] v.uk Julie Pickett: HR & Recruitment Manager [email protected]
Andy Merryweather: HR Manager Schools
[email protected] v.uk
Michelle Voutt: Reconciliation and Compliance Support Officer
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8.1. Payroll
Governing bodies are responsible for providing any necessary information
required for calculating and paying salaries and wages. Every school is
required to have a pay policy. They must also provide any necessary
information to enable the Schools’ HR to maintain records of service and
make deductions for superannuation, income tax, National Insurance and
statutory sick pay. Please refer to the estimate guidance notes for costing
information for your schools’ establishment.
For schools in Ealing the appointment and payroll processes are carried
out either by the Schools’ HR section or by an external provider. All
schools now receive payroll monies within their advances, schools that
buy into Ealing’s payroll services are then charged for these services via
direct debit.
All payments to members of staff for work done, mileage expenses, contractual and statutory maternity and sick pay must processed through the payroll system to ensure that the school complies with income tax regulations. No payment of this sort should be processed through the schools’ local bank account and/or petty cash. For more information please the EGfL’s staff expenses gatekeeping webpage: http://www.egfl.org.uk/categories/data/schl_expenditure/finance_guidance/_docs/Staff_expenses_gatekeeping_i tem.doc
Payments for work carried out at schools by individuals who are not staff members should be paid through the Central Payment System only on the basis of a bona fide invoice. The taxation status of individuals trading as self-employed needs to be established. The Inland Revenue places an obligation on employers of all such individuals to confirm their taxation status before making payments other than through payroll, in which case, tax and NI will be deducted from the payment. The Council currently vets all invoice claims from individuals, requiring them to complete a form stating their trading status. Invoices from individuals not satisfying the self- employed status requirements are paid through the payroll as employees of the council. When you receive your first invoice, you should send a copy to Schools’ HR. Contact Michelle Voutt on 020 8825 5903.
The exception is where schools employ agency staff and pay the agency for their services. These invoices can be processed through the school bank account, ensuring that the appropriate accounting code is used. Timesheet information is included below:
Processing staff payments
Payroll transactions should be processed only through the payroll system.
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i. Caretakers are required to complete the times that their work is
carried out on site. This should add up to the total hours claimed.
ii. Basic hours should be shown separate from overtime
iii. Overtime must be shown on the columns provided on the
timesheet
iv. Regular letting should be clearly shown as this is pensionable pay
v. Casual letting and meal allowances should be clearly shown and attract normal overtime rates in line with service conditions
vi. The timesheet should be completed and signed by the employee
and authorised by the Head Teacher – a copy should be retained
at the school
vii. In keeping with good practice, the caretaker must be notified of
any alterations to his/her timesheet before passing for payment
8.2. Whole School pay policy
Schools are referred to the Authority’s existing guidance on the whole
school pay policy. In summary, the key point to bear in mind from a value
for money aspect is that it should enhance the quality of education
provided for pupils at the school by complementing and supporting the
school’s strategic plan (i.e. the School Improvement Plan)
All pay decisions made by schools should be made in accordance with
the pay policy adopted by the school and should comply with the
mandatory provisions of the annual Schools teachers’ pay & conditions
document.
Refer to the DfE’s Schools teachers’ pay & conditions document
8.3. Redundancy arrangements
For additional information on the arrangements to be put in place by the
school when carrying out redundancies please refer to EGfL guidance on
this matter.
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Section J: Petty cash
9. Why is this area important?
Petty cash is useful for making small purchases. However cash is a vulnerable asset and it is important that proper controls are in place to prevent its abuse or loss. These standards contain petty cash controls covering authorisation, documentation and secure storage of cash. The governing body should ensure that these controls are in place and are adhered to. General contacts
Schools Accountancy Services: [email protected]
Steve Tinkler: Head of Audit & Investigation [email protected]
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9.1. Handling of and payments with petty cash
They should take into consideration the requirement of this form of
expenditure along with the school’s insurance cover and the risk of
holding cash on the premises. There are many schools which do not have
petty cash and write cheques for everything.
Petty cash should be obtained from the bank by cashing a cheque.
Schools can obtain petty cash by cashing a cheque from their catering
supplier. This is not ideal but acceptable, provided that adequate records
of the transactions are kept e.g. receipts/copies of cheques.
Access to petty cash must be restricted to authorised members of staff. One person should be nominated as the petty cash account holder who should be allowed to delegate others if necessary to manage the account and/or petty cash on a daily basis. At any one time only one person should have access to, and be responsible for, the cash/account; when the responsibility is transferred the cash/account should be balanced in the presence of both members of staff. Only minor items should be purchased through petty cash; the governing body should determine the maximum amount of any single transaction that may be undertaken using a cheque or cash. An amount of £75 is recommended as a reasonable sum per claim (it is not acceptable to split claims so as to avoid the £75 limit).
Purchases must be properly authorised by the appropriate budget holder who must ensure that there are sufficient funds in the budget prior to making a purchase. Regular payments to suppliers should be made by the school using their normal creditor payments route, not out of petty cash.
Amount of petty cash
The governing body should set out in writing an appropriate level for the amount of petty cash to be held. The amount should represent a balance between convenience and the risk of holding cash on the premises.
Access to petty cash
The head teacher should ensure that the petty cash fund is held securely and that authorised staff have access to it.
Payments from petty cash
Payments from the petty cash fund should be limited to minor items, which have been approved in advance by an authorised member of staff.
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Payments in respect of salaries, wages or any other employee related expenses must never be made out of petty cash. This applies to the payment of services received such as gardening, window cleaning, etc, where formal arrangements should be in place.
No income may be paid into petty cash. Income must not be used to meet items of expenditure. All income must be banked into the school’s bank account intact.
Personal cheques must never be cashed from a petty cash float or any
other fund or income held at the school.
9.2. Petty Cash controls
The petty cash fund must be independently checked by the head teacher or another senior member of staff and balanced from time to time (at least once per school half- term). This must not be done on the basis of a predictable routine.
Governing bodies are responsible for any losses on petty cash arising through negligence or fraud, and these must be met from the school budget.
Petty cash holders who leave the Council’s employment or cease to be entitled to hold an account for other reasons must account to the governing body for the funds advanced to them.
Personal cheques
Personal cheques must not be encashed from the petty cash fund.
Periodic checks
If the school has an imprest account or floats, periodic checks should be carried out between the petty cash accounting records and the bank statements, and reviewed by an independent member of staff.
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Section 10: Tax
10. Why is this area important?
The head teacher is responsible for ensuring that the school complies with
Value Added Tax (VAT) and other tax regulations. VAT is a complicated area
and the following controls merely set out the minimum framework. The LA’s
guidance on VAT should be consulted for detailed interpretation. Copies are
available on EGfL. The Construction Industry Scheme (CIS), no longer
applies to schools.
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10.1. Rules & regulations
LBE schools are treated as part of the Council for VAT purposes, and as such, are included in Ealing’s registration. Ealing Council is registered as it makes taxable supplies and is subject to the same rules as any other trader on its business activities.
- Ealing’s VAT registration number is GB 226 6700 70.
The provision of education by LA schools is termed non-business where it is provided free of charge or for a fee less than cost. Goods and services supplied to them by other Council departments are not subject to VAT.
For VAT purposes, Foundation schools are generally treated in the same way as LA schools. HM Revenues and Customs (HMRC) accept that the Council may recover any VAT it incurs on purchases made in respect of Foundation schools. This applies even where the governors have donated funding to the LA. VAT may not be recovered by the LA on capital works where the funding is derived from a specific DFE grant. These grants are always given inclusive of VAT.
HMRC do not accept “mistakes” as a reasonable excuse for the incorrect treatment of VAT, and are empowered to impose financial penalties. Penalties incurred by individual schools will be generally charged to those school budgets.
10.2. Payment of VAT invoices
Certifying officers should always make sure before authorising payment that valid tax invoice is attached and a supply of goods or services has been received. Only original or certified copies can be used to support the VAT claim, photocopies or faxes will not normally be acceptable. Internal controls should be in place to ensure that payment has not already been made as it will result in a duplicate payment, which will
Awareness of tax regulations
The head teacher should ensure that all relevant finance and administrative staff are aware of VAT and Income Tax.
PAYMENT ON AUTHENTIC VAT INVOICES
School procedures should stipulate that only proper VAT invoices are paid, as the school will not be reimbursed in the absence of such documentation.
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mean that input tax would have been claimed twice. This can normally also be picked up by close monitoring of the budget.
Invoices must not be altered under any circumstances. If there is a need for credit, a credit note must be obtained from the supplier. This will not only adjust the net amount for the goods or services, but also account correctly for the VAT liability.
10.3. Accountability of VAT
It is the head teacher’s responsibility to ensure that both the governors and staff involved in school finances adhere to rules and regulations relating to accounting for VAT on income and recovering VAT on expenditure.
When schools make payments via their local cheque account, it is very important that all appropriate records are maintained and the VAT element is clearly shown in their termly finance returns submitted to the LA. Where schools use the computer accounting software such as FMS, the VAT element will be shown separately. It is in the school’s interest that these returns are submitted on time, as any delay will mean that the school will not benefit from securing a cash flow advantage.
It is the responsibility of the school to ensure that the records clearly
show how the purchase was made. It should also be noted that should a private fund purchase items direct using this scheme, HMRC will make an assessment to recover reclaimed input VAT, and make an interest charge and financial penalties. VAT incurred on purchases made through the private fund cannot be recovered unless the private fund is separately VAT registered. If the value of the taxable supplies made by the private fund exceeds the annual VAT registration limit (with effect 01/04/16 £83,000, this amount is reviewed annually), then it must register for VAT. (Refer to Standard L2 Voluntary Funds - Benefits of Registering for Charitable Status).
Donations for specific school purchases can be made to the school’s local cheque account from the Voluntary Fund. The purchase can then be made through the local cheque account and the VAT reclaimed.
Most income received by schools is classified as non-business and therefore carries no VAT liability. There are, however, a number of sources of income where VAT needs to be accounted for e.g. private telephone calls, private photocopying, and sale of certain goods.
ACCOUNTABILITY OF VAT
School procedures should set out how VAT on business activities, school trips and other taxable activities should be accounted for, both within the delegated budget and in voluntary funds.
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Section 11: Voluntary funds
11. Why is this area important
Voluntary funds (or “Unofficial Funds” as they are generally termed) often provide schools with a substantial additional source of income. Although such funds are not public money, the standards of the guardianship of these funds needs to be as rigorous as those for the administration of the school’s delegated budget. Parents and other benefactors are entitled to the same standards of stewardship for such funds. An accountant who is completely independent of the school must certify voluntary fund accounts. This section applies to voluntary funds, which belong to the school. Funds held by other organisations, such as PTA’s, have similar standards of stewardship, but the management aspects relate to the PTA and not the governing body or LA. General contact Steven Tinkler: Head of Audit & Investigation [email protected]
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11.1. Separate accountability
In order to preserve the integrity of the funds, schools must keep unofficial funds and official funds records separate, and various computer packages are available, although manual records are acceptable.
Unofficial funds are not public funds, but parents, students and supporters of such funds are entitled to expect that they will be managed and controlled as if they were public funds.
An unofficial fund is defined as any fund established to support
school activities but generated by funds, which are independent of schools’ official resources.
11.2. Legal position
Any institution or fund, which has exclusively charitable purposes and meets the minimum requirements for registration (basically, where income from all sources amounts to more than £5,000 per annum), must be registered as a charity.
The issue arises as to whether all schools’ unofficial funds should be so registered. The Charity Commission has indicated that, when looking at school funds, it has to consider carefully whether the fund in question is governed by a charitable trust for the advancement of education or is merely designated for educational purposes. The latter will not be an exclusively charitable purpose because the designation is revocable. The distinction is a fine one.
There has not been a definitive statement to the effect that all school funds are charitable. Each case needs to be considered on its own merits. In practice it is suggested that if a school is interested in registering its fund as a charity it should contact the Charity Commission on 0845 3000 218 or visit
Separate accountability
The head teacher should ensure that voluntary funds are accounted for separately from the school’s delegated budget and are held in a separate bank account.
Registration with the charity commission
The governing body should ensure that relevant voluntary funds are registered with the Charity Commission.
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http://www.charitycommission.gov.uk/publications/cc21.aspx and the local tax office.
11.3. Implications of charity status
There are both advantages and responsibilities attached to becoming a registered charitable trust. Similarly the requirement for proper accounting processes already exists in the Council’s financial regulations. Schools will therefore need to consider very carefully their own circumstances and decide whether or not they wish to pursue charitable status or indeed whether their fund may be such as would be legally required to be registered.
The benefits of registering as a charitable trust are:
i. Tax relief may be claimed on interest paid on balances.
ii. VAT paid on purchases may be reclaimed.
iii. Donations may be made by deed of covenant upon which tax relief may be claimed.
iv. Non-domestic rate relief may be claimed.
Proper books of accounts must be maintained and financial records kept for a minimum of seven years.
Accounts must be submitted to the Charity Commissioners either annually or as requested, depending upon the precise nature of the fund. For detailed guidance on Charitable trust status and the advantages and disadvantages that they can afford, please visit the Charity Commission’s website as above.
11.4. Roles of a charitable trust
Appointment of a treasurer
The governing body should ensure that relevant voluntary funds are registered with the Charity Commission.
Appointment of an accountant
The governing body should appoint an accountant who is independent of the school. The accountant should not be a member of the governing body.
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The governing body must be made fully aware of all voluntary funds and
must nominate a responsible officer to administer each fund.
Any account with a gross income in excess of £5000 should be compiled
by a CCAB qualified accountant (CIMA, ACCA, CIPFA or AAT).
Unofficial funds are the responsibility of the governing body. The
Financial Statements, comprising a simple income and expenditure
account, a balance sheet and a certificate, must be presented to a
meeting of the full governing body annually. Interim financial statements
for the funds should be presented regularly to the governing body or its
finance sub-committee during the year.
The governing body must ensure that essential controls such as: i. Separation of duties maintaining proper documentation and
accounting records (e.g. a cashbook). ii. Performing regular bank reconciliations (which are independently
checked). iii. Payment authorisation procedures. iv. Income receipting procedures.
The accounts must be compiled annually. The accountant must be asked to complete a certificate. A suggested wording might be “I have checked the records and supporting documents related to the ……….school Unofficial Fund for the year ended …………. and verified that they form an accurate record of the transactions which have occurred and the balances which are held”.
Standards of financial accounting
The head teacher should ensure that the same standards of financial accounting, which apply to income and expenditure for the school’s delegated budget, are applied to the voluntary funds.
Treatment of income
The head teacher should ensure that the same standards of financial accounting, which apply to income and expenditure for the school’s delegated budget, are applied to the voluntary funds.
Accounts
The head teacher should present the Financial Statements, the certificate and a written report on the accounts to the governing body as soon as possible after the end of the accounting year.
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A copy of the Financial Statements of the unofficial fund must be kept for Internal Audit purposes.
All cheques must be signed by two signatories. When a signatory
receives a cheque to be signed it must already contain the payee and
amount, and must be accompanied by the supporting invoice or
documentation.
To avoid problems in contacting signatories, it is advisable to have more
than two signatories to the bank account. However, the number must be
restricted (perhaps to the head teacher, deputy head and a senior
member of staff), and any signatory must be in a suitably senior position
in the school. The governing body must formally approve the financial
authorisation limits of the members of staff responsible for administering
the unofficial funds.
`
Should any member of the school’s staff suspect that there is any
irregularity by any person in the operation of the fund they must
immediately report it to the head teacher, or, exceptionally, direct to the
Internal Audit Section. The head teacher must, when informed of a
Two cheque signatories
The head teacher should ensure that every cheque drawn against a voluntary fund bank account is signed by two signatories authorised by the governing body.
Income banked monthly
Any voluntary fund income should be paid into the relevant bank account at least once a month and in accordance with Insurance requirements.
Issue of receipts
Receipts should always be issued for any donations or income entering voluntary funds.
Regular reconciliations
The head teacher should ensure that regular reconciliations between the accounting records and bank statements are undertaken and independently reviewed.
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suspected irregularity, report it to the Internal Audit Section immediately.
Evidence of reconciliation and review should be retained.
Schools must ensure that they have adequate insurance to cover all risks
associated with the operation of the unofficial fund. LBE provides cover to
include losses from unofficial school funds, subject to policy conditions.
The policy had been extended to governors. It is, however, for the
governing body to satisfy themselves that any other risks are covered.
(Refer to section 12 Insurance).
11.5. Use of funds
Schools should ensure that funds are used appropriately, in an open and
transparent way, and for the benefit of pupils, in accordance with what
the funds were raised for e.g. the betterment of pupil attainment and
achievement. Contributions to staff Christmas meals/trips out etc. are not
an appropriate use of funds.
Insurance cover
The governing body should ensure that voluntary funds are covered by insurance, including fidelity guarantee insurance.
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Section 12: Insurance
12. Why is this area important?
All schools have risks against which they should be protected by insurance. Such risks may include third party liability, property, money, personal accident, motor vehicles and fidelity guarantee (to cover the loss of assets due to fraud or dishonesty on the part of employees). It is important that schools review their exposure to such risks to ensure that cover remains adequate and that they comply with the terms of the insurance.
School outings (including trips or journeys) are an integral part of a child’s education, providing the opportunity to develop key personal and social skills. However, it is essential that certain guidelines must be followed in order to safeguard all concerned.
General contact David Clay: Insurance Manager [email protected]
50
12.1. General information
For additional information on insurance policies please refer to the EGfL’s
insurance page.
ANNUAL REVIEW OF RISKS
The school should review all risks annually, in conjunction with the LA where appropriate, to ensure that the sums insured are commensurate with the risks.
RISKS NOT COVERED
The governing body should consider whether or not to insure risks not covered by the LA, voluntary body or foundation. The cost of such premiums should be met from the school’s delegated budget.
51
Section 13: Fraud & whistleblowing policy
13. Why is this area important?
In order to maintain those high standards a culture of openness and accountability is
vitally important. Whistleblowing is when someone raises a concern about a possible
fraud, crime, danger or other serious risk that could threaten colleagues, members of
the public, or the own Schools reputation, i.e. there is a public interest aspect to it.
Schools are expected to compile their own whistleblowing procedure.
The aims of the schools whistleblowing policy should be to:-
to assure you that if you raise concerns you can do so without fear of reprisals;
to assure you that your concerns will be taken seriously;
to provide information about how to raise your concerns and explain how the school will respond.
For more information on creating a whistleblowing policy please refer to the DfE’s
Whistleblowing procedure for maintained schools
Should you suspect any fraud within your school please contact the Steve Tinkler
([email protected]) at the earliest possible convenience.
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Section 14: Assets
14. Why is this area important?
Schools often have attractive and portable items of material and equipment ranging from library books to computers /IT and audio visual equipment. These assets should be kept under proper control. Head teachers should make arrangements to identify the items as school property, to record the location of the assets and to insure them for off-site use, where necessary. Most schools also carry stocks, mainly of the kind that are in constant use, such as stationery, cleaning materials, and sport equipment. Generally, they are consumable items and the costs are charged to the various budget allocations as each purchase is made. Often stock records are not maintained and therefore schools should keep a close watch on the quantities ordered and the frequency of ordering. They should ensure that stocks are adequately safeguarded and in the charge of a responsible member of staff. Recording assets and ensuring their safe care and custody is the responsibility of the governing body, which should maintain proper security for all buildings, furniture, equipment, plant, stores and other assets. Schools should apply the forms of internal control referenced in the financial control section to ensure the protection of their assets. Schools now have greater responsibility for their buildings and other parts of their premises and it is, therefore, important that they plan how they intend to use, maintain and develop their buildings. The schools own plan will need to match the LA’s asset management plan in relation to that school.
General contacts David Clay: Insurance Manager [email protected]
Steven Tinkler; Head of Audit & Investigation [email protected]
53
14.1. Stock/Inventory
A record of this check e.g. ticked off inventory, should be kept with a signature
and date.
In order to comply with LBE’s insurance policy an inventory must be maintained of all permanent valuable and transportable items worth more than £50 including vehicles, visual aid equipment, computer equipment, expensive tools, camping and sports equipment. It is recommended that inventories are maintained in the following format:
i. Date of acquisition ii. Serial number iii. Description of item iv. Location (on site/off site) v. Source of funding i.e. revenue, capital or leasing vi. Cost/estimated replacement value vii. Disposal, authorisation for disposal, and amount realised (if any)
Items should be clearly and permanently marked as being school property and should be included in the inventory as soon as they are received. New additions should be added to the inventory as they are purchased and an updated inventory should be sent to the Insurance Section immediately, where the school is insured through the LA, to ensure it is covered.
Items donated/”free bies” should also be listed on the asset register with an estimated value noted.
Stock levels
The head teacher should ensure that stocks are maintained at reasonable levels and subject to a physical check at least once a year.
Maintenance of inventories
Up-to-date inventories should be maintained of all items of equipment. Such items should be identified as school property with a security marking.
Checking inventories
The head teacher should arrange for inventories to be checked at least once a year against physical items. Inventories are checked by someone other than the officer who maintains them. All discrepancies should be investigated and any over a predetermined sum reported to the governing body.
54
The schools must have a process for the logging of all equipment that is taken off
site, this should include the logging of the reason for taking the asset off site
along with the relevant authorisation from the head teacher. This should be
reflected in the inventory.
14.2. Disposals & write offs
As part of the internal manual of procedures, the governing body should specify
the maximum values of stocks and equipment which the head teacher may write-
off or dispose of without reference to the governing body.
Under LA regulations any disposal of an asset over £2,000 should be done
through a competitive tender or a public auction, for items under £2,000 written
bids should be obtained. If an item is disposed of with a potential value of
£10,000, authorisation must be obtained from the Executive Director of Corporate
Resources.
All safes, locked cupboards and other secure areas should be kept locked at all
times. Keys should be held by the responsible officer. The number of key holders
should be kept to a minimum (no more than three sets is recommended) but with
normal day to day access restricted to one individual in order to ensure
accountability.
The head teacher must ensure that sensible controls operate to make the
school’s property secure. This includes ensuring that the amount of cash and
cheques held on school premises is minimised by preferably weekly banking.
Approval for off-site use of property
Whenever school property, for example musical instruments or laptops, is taken off the school site, it should be signed for and a register noted accordingly.
Authorisation of write-offs
The governing body should authorise all write-offs and disposals of surplus stocks and equipment in accordance with LA’s regulations.
Locking of safes etc.
Safes and similar deposits should be kept locked and the keys removed and held in a different location.
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Cash and cheques should also be held securely and should not exceed the limits
of the school’s insurance cover.
14.3. Asset management plan
To assist in the process of strategic decision making the LA is working with its
partners to further develop and implement the Asset Management Plan
(AMP).That plan will provide the basis for prioritising needs and determining the
respective responsibilities of the LA, schools and diocesan education boards.
A key output of the plan is a prioritised programme of work to address the most
serious and urgent needs of the LA’s school building stock in terms of condition,
sufficiency and suitability. The funding to carry out the works can come from
various sources, e.g. school budget, devolved capital, central government bids.
The Asset Management Plan Local Policy Statement contains further details of
Ealing’s AMP. A copy has been sent to all schools and further details can be
obtained from the School’s Property Group.
Asset management plan
The governing body should have a plan for the use, maintenance and development of the school’s buildings.
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Glossary of terms
ACCRUAL
A sum included in the final accounts to cover income or expenditure attributable to a
financial year for goods received or work done, but for which ·payment has not b en
made by 31st March (also known as a creditor provision).
EXTERNAL AUDIT
· An independent examination of the Council's accounts to ensure that they comply
with the necessary-legislation and follow best accounting practice.
BALANCE
. The capital or revenue reserves of the school made up of the accumulated surplus of
income over expenditure.
. CAPITAL EXPENDITURE
· This is expenditure on items, which provides benefit to the school for more than one
year. Such items include land, buildings, high value equipment, and vehicles.
/
CARRY FORWARD The balance of income over expenditure at the end of a financial year, which is
moved to the next financial year.
. CONTINGENCY
An amount set aside to provide for items that have not been included in ·the budget
estimates. i.e. money held as reserves for unexpected emergencies.
. .
CREDITORS Amounts owed by the school for goods and services provided for which payment has
not yet been made.
· DEBTORS
Amounts due to the school but not received.
DEFICIT
This is the amount of money that the school has overspent e.g. expenditure over
income, at the end of a financial year.
DfE
· Department for Education.
ESTIMATES
The amounts that are expected to be spent, or received as income, during an
accounting period. - The term is also used to describe detailed budgets, which are
. Either prepared for the following year, or have been approved for the current year.
57
FINANCIAL REGULATIONS
A written c o d e o f procedures approved by the authority, intended to provide
a framework for proper financial management, Financial regulations usually set
out rules on accounting and audit adn1inistrative procedures and budgeting
systems.
FINANCIAL YEAR
The financial year runs from 1 April to 31 March.
INTERNAL AUDIT
The internal audit service provided by Mazars provide assurance to management on
the adequacy and effectiveness of internal controls and consider how efficiently Resources have been used.
The in-house team provide advice and consultancy to management and work
proactively on improving corporate governance, and the prevention and detection of
fraud. · LBE
London Borough of Ealing.
LA
Local Authority
PROFILING Splitting down into time periods. In terms of budgeting this can be splitting the total budget in a specific area into monthly/periodic expenditure and income amounts. - RESERVES An amount set aside for a specific purpose in one financial year and carried forward to meet expenditure in future years.
REVENUE EXPENDITURE Day-to-day payments on the running of school, e.g. salaries, wages, supplies and services and capital charges. STANDING ORDERS The·set of rules adopted by the authority, which establish the procedures by which it should conduct its business. In particular, there must be standing orders relating to tendering and contract procedures. SURPLUS This is the amount of money that the school has as spare e.g. income over expenditure at the end of a financial year. VIREMENT This is the movement of money from one budget heading into another.
[School Logo] App 1
Example Terms of Reference for Finance Committee
1. Membership.
The committee shall consist of five or more governors including no less than 3 governors not permanently employed by the School and the headteacher. Non-governors may be co-opted by the committee but the full governing body must determine their voting rights. The majority of committee members must be members of the governing body and no vote can be taken unless the majority of members present are governor s.
2. Quorum.
The quorum shall be a minimum of 3 governors which must include the headteacher and 1 governor not permanently employed by the school.
3. Meetings and attendance rights
Meetings should take place at least once a term and otherwise as necessary. Agendas should be discussed and drafted by the chair and headteacher. Any major items must be included on the agenda and not introduced under Any Other Business unless the meeting deems it to be extremely urgent. Decide on attendance rights.
4. Minutes.
Each meeting shall delegate a governor or appoint a clerk to take minutes, which shall be circulated to all governors before or at the next full Governing Body Meeting. The head cannot take minutes (statutory).
5. Chair.
The Committee shall elect annually a Chair and a Vice-Chair. (The committee may not be chaired by non- governors or anyone employed to work at the School).
6. Terms of Reference:
to provide guidance and assistance to the headteacher and the governing body in all matters relating to budget and finance
to discuss and adopt the budget (with any amendments which are agreed) NB. The full governing body must approve the first formal budget plan of the financial year
to consider the governing body’s budgetary priorities with particular reference to the school’s Development Plan, previous OFSTED Report and DfE directives
to prepare and review financial policy statements including consideration of long term planning and resourcing
to agree limits of delegation and the power to transfer between budget headings (virement)
to monitor expenditure against budget, evaluate outcomes and report the financial situation to the governing body at each termly meeting
to receive and, where appropriate, respond to periodic audit reports of public funds.
to explore all possible sources of income for the school and secure only those funds which conform to the aims and ethos of the school
to adopt and adhere to current LA Schools’ Model Financial Regulations & Standing Orders
To complete and submit the Schools Financial Value Standard as directed by the DfE
To clarify the division of financial responsibilities, the headteacher shall be responsible for:
drawing up the proposed budget options for delegated funds, special purpose grants and other anticipated income for consideration and approval by the governing body.
incurring expenditure within delegated limits once the budget has been agreed
submitting regular monitoring reports of expenditure against budget to the finance committee
1 of 1 Ratified by GB:Date
Andrew Dodge (Governor Consultant September 2012)
GOVERNANCE FOR MANAGEMENT OF A SCHOOL BUDGET App 2 To meet various Audit requirements please complete all GREEN boxes prior to submitting your budget
Name of School
6 digit Cost Centre Code
DfE No
0
School Budget Share
(delegated, devolved Budget)
Budget
Balances?
Name of Headteacher (Print)
Chair of Governing Body (Print)
Chair of Finance committee (Print)
Date Budget to be received by Ealing
Children and Families accountancy team
(dd/mm/yy)
Date of Governing Body meeting which
agreed final budget plan (dd/mm/yy)
Scheme of Delegation
Maximum amount delegated by Governing
Body (£)
Ealing Council recommended levels
Authorisation limits
Role * Please edit as appropriate Orders
Invoices
Virements
Primary & Special
High
Headteacher/Deputy Headteacher no limits
10,000.00
30,000.00
Finance/Resources Committee 25,000.00
50,000.00
Full Governing Body £25,000+
£50,000+
Please enter Role e.g.
Headteacher/Deputy Headteacher
Signatures on Cheques or authorisation of BACS payments - Bank Mandate
Any 2 signatories can Sign
Annual controls and checks discussed by Governing Body whilst setting final budget for 20**/**
Enter letter 'a' in
green box to
confirm task
actioned
Budget plan takes into account the latest Audit and OFSTED recommendations
Budget set in line with the schools SDP/SIP
Schools Finance Policy has been reviewed
Training budget has been set with Finance staff and GB/Finance committee members in mind
Scheme and structure of delegation renewed
Headteacher to advise school finance staff inc budget holders of the schools financial procedures
All the above have been minuted. GB minutes and actual forms to be handed to the school finance officer for
their records
Signatures
Headteacher Date
Chair of Governors Date
Minutes held by school Dated
Register of Business Interests App 3
[School Name]
The general principle is that no-one should be involved in a decision where his or her personal interests, or those of any member of their immediate family, may conflict with those of the governing body. The purpose of this register therefore is to help avoid any conflict between the business interests of individual governors, the headteacher or members of their immediate families and the interests of the school. See overleaf for further details.
Name of Governor: (Please print)
Term of Office From
To
Name of business Type of business Nature of involvement Person involved Notes
(please continue overleaf if necessary)
or I have no relevant business interests
Signature Date
Record of Reviews (Clerk to governors to distribute amendments and signature annually)
Date of Review
Initials
Date of Review
School Workforce and Governance Development
Initials
An interest might include a directorship, significant shareholding or other appointment within a business that the school has dealings with or might have dealings with in the future. The type of business might be any that the school would invite to tender or place an order with. It is not possible to give definitive list of the types of interest that should be included so examples include, but are not limited to:
building works
IT & other equipment
office & educational supplies
cleaning
catering
grounds maintenance
banking
other administrative support services.
Inclusion of an interest on the register does not necessarily prevent the school from dealing with the business concerned. However, the governor concerned should not be involved in the decision to do so.
When making a decision on what should be disclosed, the individual should bear in mind the basis on which a third party might challenge their decision to disclose or not to disclose information. However, as a general rule, small savings accounts or small shareholdings in quoted companies would not usually need to be disclosed. If in doubt, you should include an item on the register rather than leave it out.
Governors are reminded that completion of this form does not remove the requirement upon them to disclose orally any interest at any specific meeting and to leave the meeting for that agenda item.
School Workforce and Governance Development
Heads Timetable App 4
Monthly:
- Last working day - Teachers Pensions/AVC's if not using LBE Payroll H2 - Budget monitoring & virements C1/2 - Cash Flow forecast C5 - Bank a/c reconciliations G1/2 - Head or Governor to check petty cash fund JB
Termly:
- Budget monitoring for Finance Committee - Staff statement H7 - Governing body meetings - 1 Autumn-plan training /occasional days for next academic year - Spring-governors agree training days
Annually:
- Report to parents - Private funds certified L7 - Review insurance risks N1 - Check inventories M3 - Annual Teachers salary assessment
Monthly Timetable by Financial Year: April - 1st Cash Payment
- Meet with Governors to ratify Budget - Monthly Budget Advance
May - Outturn Position Reporting - 1st Friday Submit a balanced budget - Monthly Budget Advance
June - School Balances Form - Teachers Annual Service Return Pensions H2 - CFR - Monthly Budget Advance
July - Send 1st Term Bank & VAT Return - Monthly Budget Advance
August - Monthly Budget Advance
September - Set 3 Year Objectives - Review SIP - Monthly Budget Advance
October - 2nd Cash Payment - Pupil Census - Monthly Budget Advance
November - Workforce Census - Monthly Budget Advance
December - Send 2nd Term Bank & VAT Return - Monthly Budget Advance
January - Pupil Census - Indicative/final budget allocation - Decide on SLA buybacks - Monthly Budget Advance
February - Review budget/prepare draft for Governing Body - 3rd Cash Payment - Monthly Budget Advance
March - Creditor/debtor provisions - 3rd (Final) Bank & VAT Return - 3rd (Final) Term Bank Account Return - Monthly Budget Advance
Finance Timetable App 5
Accountancy Timetable Weekly Petty Cash Processing, Orders, Invoices, Cheque Payments. Equipment Register Bank Income Reconcile Bank Statements
Monthly BCR Reports: check salary reports for accuracy and
post central payments for salaries, reconcile salary amounts to the main cost centre report; post central payments/receipts from non staffing transaction report and check that journal requests have been posted; check budget adjustment report for any additional budget and allocate this to the fund and the cost centres, check that virement requests have been posted.
Virement forms to Education Accountancy.
Finance Return if completing monthly returns.
Half Termly
Budget Monitoring Report for Headteacher
Termly Budget Monitoring Report for Governing Body/Finance Committee/Budget Holders
Long Term Sick claims
Finance Return
School Census – ensure all SEN, EMAG and
FSM data is entered on the MIS system. January Issue budget holders with spending analysis reports.
Prepare staffing list for budget setting February Chase outstanding orders/invoices
Last order deadline for budget holders
Creditor/Debtor Provisions – process on FMS and e mail to Education Accountancy. Print off cumulative expense analysis for budget setting, which includes creditor/debtor provisions.
Cancel outstanding commitments where the goods will not be received. Set up the new financial year on FMS. Carry out FMS year end system check by 31/03/****.
Produce final Finance Return, and final zero VAT Submittal to 31/03/****
March Estimate outturn, by taking actuals, including
creditor/debtor provisions, and adding on estimated salary costs for March.
Discuss SLA buy backs with Headteacher, and complete SLA buy back form online, submitting by deadline
Set first draft new budget.
Review Scheme of Delegation. Complete SFVS and email to [email protected] by deadline 31/03/****
Complete preliminary close on FMS.
Finalise new budget. Ratify at Governing Body.
April Allocate provisional budget to cost centres to allow orders to be raised. Review Finance Committee Terms of Reference
Review Structure and Scheme of Delegation
Allocate and fix the agreed budget on the fund and in the cost centres on FMS.
Inform budget holders of their budgets.
May Submit agreed budget to Education Accountancy by the deadline date. (First Friday in May)
Complete school balances form and send to Education Accountancy.
June Reconcile final BCR reports to FMS. Produce preliminary CFR return. Once the preliminary CFR return balances carry out final close on FMS.
Produce final CFR return and export to COLLECT.
July
August
C:\Users\LIqbal\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\C1N5S7RK\app_5
finance_timetable update 09 09 14.doc
September Revise budget to reflect September staff changes.
Pupil Census October Present CFR report at Governing Body/Finance
Committee meeting for signing off. Review Whistleblowing Policy Review Best Value Statement
Review Statement of Internal Control. Review Finance Policy. Complete Register of Business Interest Forms
Governors and Staff Competencies Matrix
Workforce census November
December Prepare for January School Census
Yearly
Private Fund Audit
Inventory Stock Check
School Journey Reconciliation
C:\Users\LIqbal\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\C1N5S7RK\app_5 finance_timetable update 09 09 14.doc
SCHOOL VIREMENT FORM APP 6 (For Schools internal use only – amend as appropriate)
DEPARTMENT: DATE:
SCHOOL NAME: FINANCIAL YEAR:
School Reference
Reason(s) for virement and
description
VIREMENT Description Accountancy Code AMOUNT (£)
From (cr):
To (dr):
AUTHORIZED BY: NAME Signature
(Please print name)
POSITION (*Chair of Finance/Head/Deputy Head). DATE:
* Delete as appropriate. Please ensure that the virement has been authorized in accordance with the Governing Body rules.
App 7
Facilities Booking Application Form
[School Name]
Hirer
Full Name:
Address:
Telephone (daytime):
(Evening):
Email:
If acting on behalf of a business, club, organisation etc please state its full name and address plus your position there.
Name of Organisation:
Address:
Your position in the organisation:
Areas and Facilities
Hired
This should include setting
up/breakdown times No extension can be agreed at
the time of the event
Day and Date of event(s)
Area/Facilities Times of Hire
Further Details You must accurately disclose the purpose for which the site and/or space is required at the
time of booking. Any misrepresentation will entitle
the school to cancel the event and retain the deposit/hire fee.
Event Title Equipment Required
Please note that hirer’s own electronic equipment must be PAT tested.
Is the event/Activity exclusively for 0 – 19 year olds?
□ YES □ NO
Expected Numbers
Insurance
All hirers should have public liability insurance with minimum cover of £2,500,000*
Name of Insurer: …………………………..
……………………………………………….
Policy Number: …………………………….
Expiry Date: ……………..
Limit of Indemnity: …………………………….
Please enclose a copy of the insurance certificate when returning this form.
* This can be arranged at a charge through LBEaling Insurance Section. The school can advise you of the details.
Certificates/ Qualifications
If you are planning to deliver coaching activities, does the coach or leader possess appropriate qualifications?
□ Yes………□ No
If yes please give details: ………………………………………………...
CRB checks If this coaching involves young people (under the age of 18), has the coach been CRB checked?
□ Yes □ No
If yes, please give the date on the certificate: …………………………
Declaration
1. I undertake to pay the appropriate hiring charges 2. I have read and agree to be bound by the Term and Conditions of Use 3. I agree to indemnify the school against any claims for loss or damage or personal injury or any associated costs arising from this agreement 4. The school reserves the right at any time, including during the event, to refuse or cancel the hire of the site which they consider to be objectionable or in any way detrimental to the reputation of the school.
Signature: …………………………………….
Date: ………………………………………….
Return
Once fully completed, this application form and a copy of your public liability insurance certificate, and Risk Assessments (optional) should be returned to:
School Address
FOR OFFICE USE ONLY
Agreement
Approval of hiring by Lettings Officer / Business Manager/Head Teacher:
Signed:
Date:
Payment
For regular hires you can elect to pay via invoice at the end of every month, or weekly at reception. Please indicate below: Monthly Invoice: Weekly Invoice: Otherwise a deposit of 25% is due at the time of application Balance and holding deposit (£100) to be paid not less than 14 days before the first letting/lettings.
TERMS & CONDITIONS OF USE
These terms and conditions, together with the form of application to hire the school, shall constitute the contract between the school and the hirer(s).
Application
1. Application for hire must be on the application form provided which will form the basis of a license to use
School premises.
2. If an organisation is hiring the accommodation both the organisation itself and its members are jointly and severally liable under this agreement.
3. The hirer must ensure that everybody making use of the accommodation complies with the conditions of use.
4. This agreement is personal to the hirer and may not be assigned to any third party.
5. The number of persons using any hired property/premises shall not exceed the number advised by the hirer
and authorised by the school.
Cancellation
6. There will be at least two weeks notice, in writing to the school, for any cancellation of a booking made by a
hirer. Cancellations made after this date will be charged at half the booking fee.
7. The school reserves the right to cancel any licence at any time in the event of the school requiring any hire property for school purposes or for any other reason which is considered necessary by the school. This may be at short notice.
Payment
8. The first month’s fee is payable in full upon signing this agreement.
Indemnity and Insurance
9. The hirer shall be responsible for all damage caused and shall indemnify the school against all loss, damage
and expenses unless due to the negligence of the school and any such damage shall be reported immediately to the school.
10. Any damage caused to the accommodation (or elsewhere in the school) shall be compensated to an extent
considered reasonable at the discretion of the school within seven days of a written demand.
11. The hirer shall indemnify the school against all and any expenses, liability, loss, claim and proceedings arising in respect of personal injury to or death of any person or damage to any property arising directly or indirectly from the use of the accommodation unless due to the school’s negligence.
12. The hirer shall obtain insurance against legal liabilities to third parties (including the school) with a limit of
indemnity of at least £2,500,000 for any one incident. Where the hirer is unable to provide details of current, adequate public liability insurance cover (normally a private individual or independent group), they must pay a premium to obtain such insurance from the council.
The Premises
13. Access is restricted to the rooms comprised in the accommodation and any toilet facilities and access shall
only take place during the designated time and for the permitted purpose.
14. Smoking is not allowed anywhere on the site.
15. This agreement does not include the use of any equipment, including PE, except where specifically agreed and subject to any further fees chargeable; kitchens and catering equipment shall not be used unless approved by the school subject to any conditions that may be imposed.
16. Car parking is only allowed in the allocated car parking spaces. All roadways must be kept clear. “No parking”
signs must be respected.
Performing Rights and Licences
17. No copyright works shall be performed in the accommodation without the licence of the copyright owner and
the hirer shall indemnify the school against any penalty or sanction for any copyright infringement that may occur.
18. The hirer shall not use the accommodation for any purpose or activity for which a licence or permission is
necessary, e.g. preparation and sale of food, unless such a licence has been obtained.
19. The accommodation shall not be used for the sale or display of goods or services or for any public
entertainment unless agreed with the school. 20. No alcoholic drinks shall be brought onto the accommodation except where the school agrees otherwise and
where a licence has been obtained. 21. No film or video shall be shown in the accommodation or taken in the facilities without the school’s prior
consent.
Health and Safety
22. The hirer is responsible for the health and safety of everybody using the accommodation (including first aid)
and must make itself aware of the fire precautions and procedures in existence. There will be a member of the school staff on the premises throughout the duration of the letting(s). Please report to him/her on arrival and notify them of any problems during the letting(s). or The caretaker will be present to unlock the premises at the beginning of the hiring and lock up again at the end. He/she will not be available during the period of the hire, except in extreme circumstances
23. Electrical apparatus shall not be brought onto the accommodation without the school’s consent.
24. Animal, other than guide dogs, are not permitted on the school premises without written prior consent of the
school. 25. The hirer shall leave the accommodation in a clean and orderly state.
26. The disposal of any refuse arising from the use is the responsibility of the hirer.
27. All clubs hiring the facilities must have staff who have appropriate coaching certificates and are checked with
the criminal Records Bureau if working with children under 18 or vulnerable adults, even if this is supervised. A qualified person must be present during all sessions that are considered to be of a hazardous nature, e.g. karate,gymnastics, judo etc.
28. In relation to activities for children, the hirer must ensure that there are sufficient adults present to be in full
control of the children throughout the whole period during which they are on the school site. 29. Club/organisations hiring the facilities may need the following policies in place: optional
a. Health & safety b. Quality assurance c. Child protection (if working with children)
Preservation of Order
30. The hirer shall not cause nuisance or annoyance to the occupiers of any neighbouring premises.
31. The school does not accept any responsibility for any articles of property left by the hirer, their guests, agents
or any member of the public on the hired property during the period of the hire.
Procedures App 8
1.
Process
Order Requisition
Action
Signed by: Budget Holder/Headteacher
2.
Purchase Order raised on FMS
Signed by: as per Scheme of Delegation
3.
Delivery Note
Signed by:
4.
Invoice processed on FMS
Data Inputter
5.
BACS Run Report and Invoices
(SBM/Bursar/Headteac
Signed by **** As per the Scheme of Delegation
her/Deputy Headteacher) before uploading via SupportNet
6.
Audit Trail Report
(changes to supplier bank details)
Signed by **** (Deputy Headteacher/SBM/Bursar) before uploading
BACS file via SupportNet
7. Upload BACS file via SupportNet this must be done 5 days prior to payment (Zipped and Password protected)
8. Detailed Pre-Authorisation Reconciled to BACS Run Report by Data Inputter and signed.
Must be checked the same day as received, contact BACS if any errors to stop the BACS payment
9. Input Report (Login delegated to Finance Officer to enable printing of report). This is at the Bank payment services
WHEN PRINTED THIS MUST BE SIGNED BY: *****2 BANK SIGNATORIES accompanied by all supporting documentation i.e.:
1 – 9 as above
BACS Payment Services
This is at the bank (not the BACS Bureau)
When the file has been submitted to BACS, Capita will
email you to confirm the Transaction and Monetary
Totals, and the Pay Date. (Detailed Pre-authorisation
Report). This is confirmation from Capita that your BACS
file has been successfully transmitted to BACS. If you do
not receive this email, please call Capita immediately.
On or around the Processing Date, you will receive an e-
mail from BACS informing you that an Input Report is
available for you to download from BACS. This is your
confirmation of what you have sent to BACS. Please make
sure that you check the report. It is your responsibility to
check this to make sure the totals are correct. If you do
not receive the Input Report, please contact your bank as
soon as possible. The Web Address for accessing your
reports https://paymentservices.bacs.co.uk
This is signed off by whoever normally signs the cheques for the
account. Scheme of delegation
The Headteacher should have received an email with log
on information, if they do not have access to this website,
and need access to download BACS reports. Please
contact your bank for an application form; you can also
request additional users for the other named signatures
on your bank mandate. Once the application is successful,
the bank will provide the user with a login name and
password for the site.
ICO lo
IT asset disposal for organisations
Data Protection Act
Contents
Introduction.............................................................................1
Overview.................................................................................2
What the DPA says ...................................................................3
Create an asset disposal strategy ...............................................3
How will devices be disposed of when no longer needed?............3
Conduct a risk assessment of the disposal process.....................4
Identify the devices containing personal data ............................4
Categorise the personal data...................................................4
Consider using a third party service provider.............................5
Selecting an IT asset disposal company.......................................5
Draw up a contract with the data processor ..............................5
Manage the asset disposal process and data processors .............6
Assign an asset disposal champion .............................................6
Other considerations ............................................................... 7 More information ..................................................................... 7
1
Introduction
The Data Protection Act 1998 (the DPA) is based around eight
principles of ‘good information handling’. These give people specific rights in relation to their personal information and place certain
obligations on those organisations that are responsible for processing it.
An overview of the main provisions of the DPA can be found in The Guide to Data Protection.
This is part of a series of guidance, which goes into more detail than
the Guide, to help data controllers fully understand their obligations and promote good practice.
This guidance explains to data controllers what they need to
consider when disposing of electronic equipment that may contain personal data.
Overview
You should:
ensure that the responsibility of asset disposal is assigned to
a member of your staff with a suitable level of authority;
complete a full inventory of all equipment that you have
marked for disposal;
be clear about what will happen with devices when you no
longer need them;
consider the security vulnerabilities associated with each
method of disposal;
ensure you delete personal data before recycling devices, so
that data is not accessible to others after the device has left
your ownership;
be aware that any specialist service provider you use will be
considered to be a ‘data processor’ under the DPA; and
have a written contract in place between you and the data
processor, ensuring that there is an appropriate level of
security in place.
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What the DPA says
The seventh principle says: appropriate technical and
organisational measures shall be taken against accidental loss or destruction of, or damage to, personal data.
It means you must have appropriate security in place to prevent the
personal data you hold from being accidently or deliberately compromised. This is relevant in the IT asset destruction and
recycling processes. More information can be found in the seventh principle section of
our Guide to Data Protection. In general, this means you should:
design and organise your security to fit the nature of the
personal data your organisation holds and the harm that may
result from a security breach;
be clear about which member of its staff in your organisation
is responsible for ensuring information security;
make sure you have the right physical and technical security
measures in place, backed up by robust policies and
procedures and reliable, well-trained staff; and
be ready to respond to any breach of security swiftly and
effectively. If personal data is compromised during the asset disposal process, even after it has left your organisation, you may still be responsible
for breaching the DPA so it is important to manage the process correctly.
Create an asset disposal strategy
Add a section to your security policy that addresses the process of
IT asset disposal and personal data deletion. Consider the following
points when creating your strategy: How will devices be disposed of when no longer needed?
Be clear about what will happen with devices that are no longer needed. Will they be made available for reuse or will they be
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recycled, or destroyed? Consider how IT assets will be removed from your organisation and who will be involved in this process.
Conduct a risk assessment of the disposal process
Whether you decide to use a specialist asset disposal service provider or delete personal data yourself before recycling, it is
important to consider the security vulnerabilities associated with each method of disposal.
You may recycle usable equipment, donate it to another user or
return leased equipment to the owner. You may decide that you can delete personal data within your organisation before recycling
equipment and devices but using a specialist service provider is also an option. In all circumstances, it is important to consider what
personal data may be leaving your organisation along with the device it is stored on. Your risk assessment should consider the
process of handing your equipment to a third party and you should always be aware, and make a written record, of who you are
handing the devices to.
More details can be found in the Selecting an IT asset disposal company section below.
Identify the devices containing personal data
Much of your data may be stored on PCs and laptops but think about other devices that store electronic data such as printers,
faxes, servers, smartphones, tablets and USB or backup storage. If you are not using a specialist service provider to recycle your IT
assets, make sure you wipe personal data before recycling, so that it is not accessible after it has left your organisation. Some of the
techniques in our Deleting personal data guidance may suit your organisation’s requirements.
Update your security policy as your organisation begins to use new devices that are capable of storing personal data so that you can
dispose of these securely, when needed. Categorise the personal data
The DPA says that you should have a level of security in place that
is appropriate to the nature of the information you hold and the harm that might result from its improper use or accidental loss or
destruction.
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Consider using a third party service provider
If you choose to use a specialist service provider to remove your IT assets, make sure you include clear details in your security policy
about how the chain of custody is to be managed. Devices should not leave your organisation before you have established who is
responsible for deleting the personal data contained on them, whether that is someone within your organisation or the specialist
third party provider as part of its service.
Selecting an IT asset disposal company
If you use a specialist asset disposal company to recycle your old
electronic equipment it will be defined as a ‘data processor’ under the DPA. As the asset disposal company will be acting on your
behalf, you will be responsible under the DPA for what the provider does with any personal data contained on the devices that it is
recycling. If the provider does not successfully delete personal data that is subsequently compromised you may be responsible for the
breach. Read further guidance on the relationship between a data
controller and a data processor in Identifying data controllers and data processors.
Choose an IT asset disposal company that provides sufficient
guarantees about its security measures. You should be satisfied that your service provider will treat the personal data with the same
level of protection, or better, as you.
Look for independent approval of products used in the deletion
process such as CESG, the UK government’s national technical authority for information assurance.
If possible, conduct a client site assessment and audit of your chosen disposal company. Continue to audit the data processor for
compliance throughout the business relationship. Draw up a contract with the data processor
The DPA sets out that a written contract must be in place between your organisation and the data processor, so that both parties are
aware of their obligations. Ensure that your contract includes:
• explicit direction on the services to be undertaken and that it may only act in accordance with your instructions;
• an approved specification for IT asset disposal which is aligned to your disposal/security policy; and
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• full details of all downstream partners involved in the service. Any downstream partner contracts should include the same
data controller specification for IT asset disposal as the
minimum service level to be met. Manage the asset disposal process and data processors
Complete a full inventory of all equipment that is marked for
disposal. As noted above, you should maintain a written record of all equipment transferred to your service provider if you are using
one. Monitor and audit your service provider regularly to ensure that it is complying with your instructions, putting its security measures into
practice and maintaining the expected service quality by establishing an on-going audit process.
If you lease equipment such as printers, check what the leasing company will do with the equipment when it is returned. In particular, check to see if it wipes personal data from devices before these are resold or recycled. You may need to delete information contained on the hard drives of items such as printers before they are returned to the leasing company and recycled.
Assign an asset disposal champion
Ensure that the responsibility of asset disposal is assigned to a member of your organisation with a suitable level of authority, as
security measures can become flawed and out of date very quickly, particularly if there is no accountability within an organisation.
Your IT security manager might be suitable but, if you do not have one, make sure that someone is aware of which devices are leaving the organisation, what personal data is stored on them and who has responsibility for erasing the personal data.
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Other considerations
Other relevant ICO guidance includes: Deleting personal data
More information
This guidance has been developed drawing on ICO experience. Because of this it may provide more detail on issues that are often
referred to the Information Commissioner than on those we rarely see. The guidance will be reviewed and considered from time to time in line
with new decisions of the Information Commissioner, Tribunals and courts.
It is a guide to our general recommended approach, although
individual cases will always be decided on the basis of their particular circumstances.
If you need any more information about this or any other aspect of data protection, please contact us: see our website www.ico.gov.uk.
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